Did the Great Resignation class of 21-22 just pick the worst time to retire?

[Metalcat]

If you have an awful job, then I understand the sentiment. But then you should have probably switched jobs or careers a long time ago.

I don't have an awful job, but I have been doing it for far too long, and I've become cynical. But, we go through our education, follow a career path and end up with a well paid job (and we support our family). Isn't that how life is?

Switching careers and starting over isn't really something that many people can do, especially when trying to build a FI stache at the same time. I think that having made it (pay wise), you might never fully recover from a career change. So people are inclined to slug it out, for as long as they can, in a situation that they might not enjoy or be good at. Many people don't ever make the sort of money that some of us here are on.

If it's forced on you, like @Malcat, that's something different. Likewise if you're FIRE'd and want a side gig, perhaps that's easier as you're not giving anything up - except some of your time.

I'd like to add that it's really hard to be motivated to learn a new job while suffering from severe burnout.

Yessssssss

What I wanted to do in retirement changed pretty dramatically when the fogma of burnout finally lifted.

[maizefolk]

And again, it's not trading one for the other.  It's getting rid of one for the possibility you *might* have to do the other, for a while.

I think that is true of a general retirement, currently 2022 is looking very much like it could be in th 5% of 4%WR fails, so that possibility is much more of thing.

I think you're double counting risk a bit here.

Scenario 1: we don't know which years will fail until they do. In this case there is a 4-5% chance you end up needing to work at some point after retirement (based on cFireSim results, less if we use different datasets like the original trinity study).

Scenario 2: We know which years will fail. In this case a person retired right at the start of 2022 with exactly 25x their expenses will need to work at least a little sometime in the next three decades with 100% certainty and people who retired at the start of 2021, 2020, 2019, 2018, etc have a 0% change of needing to work at all in the next three decades.

But if you add additional concentrated risk for 2022 without reducing the background risk for all years that are not 2022 the same failures get counted twice and you end up seeing the choice to retire and enjoy your life as twice as risky as it actually is.

What do you see as "adding additional concentrated risk"? And why are 20, 19, and 18 put at 0% for failure?

This story is still playing out. bear/trough could be done and market prepping for the next bull within 6 months, or the market could drop another 30% and chaos reigns as capitulation dominoes through markets, or it could just go sideways for 4-5 years. Maybe a decade? Party like it's 1969.......

In any scenario, this is a classic case of SORR, and if you still think that a 5% fail possibility for a retirement simulation in Jan 2022 is still just a 5% fail....

ok?

I just disagree.

Let's start with an agreed upon assumption (whether it's actually true or false): 5% of start dates with a 4% withdrawal rate end in failure.

If failure years look the same as any other year, any year has a 5% risk of failure.

If failure years look completely different from other years like 2022 might have a 100% risk of failure and years that don't look like 2022 might have a 0% risk of failure.

There are intermediates here. Perhaps after 8 months we can project with 50% certainty, an 2022 has a 50% risk of failure and years that don't look like 2022 have a 2.5% risk of failure.

But if you treat years like 2022 (and maybe 2009, and 2000, and 1972, and so on) as having an increase risk of failure without also decreasing your baseline assessment of risk in other years that don't have major market declines and/or inflationary spikes, that means you're making decisions about how to live your life based on an overall risk of retiring with exactly 25x expenses of ~10% which is more than twice as high. That is going to distort your thinking and push you to spend more of your life doing stuff that doesn't make you happy.

[maizefolk]

A simpler example to show the issue:

Imagine you're playing an honest version of the shell game. There are three cups and under one of them is a ball that you want to find to win the game.



If you know exactly which cup the ball is under, the odds of a ball under that cup is 100% and under the other two is 0%.
1*100% + 1*0% + 1 * 0% = one ball expected.

If you lost track of which cup has a ball under it entirely, the odds are 33.3% under each cup.
1*33.3% + 1*33.3% + 1*33.3% = one ball expected.

But what you're describing is being confident the ball is under one cup, but also remaining uncertain if there is a ball under each of the other cups.
1*100% + 1*33.3% + 1*33.3% = 1.67 balls expected.

[mistymoney]

A simpler example to show the issue:

Imagine you're playing an honest version of the shell game. There are three cups and under one of them is a ball that you want to find to win the game.

If you know exactly which cup the ball is under, the odds of a ball under that cup is 100% and under the other two is 0%.
1*100% + 1*0% + 1 * 0% = one ball expected.

If you lost track of which cup has a ball under it entirely, the odds are 33.3% under each cup.
1*33.3% + 1*33.3% + 1*33.3% = one ball expected.

But what you're describing is being confident the ball is under one cup, but also remaining uncertain if there is a ball under each of the other cups.
1*100% + 1*33.3% + 1*33.3% = 1.67 balls expected.

The game as I see it has five shells, and we've already picked one up - it had -22% under it. Now there are 4 more left and you need them to add to at least 0 at the end.

[GuitarStv]

A simpler example to show the issue:

Imagine you're playing an honest version of the shell game. There are three cups and under one of them is a ball that you want to find to win the game.

If you know exactly which cup the ball is under, the odds of a ball under that cup is 100% and under the other two is 0%.
1*100% + 1*0% + 1 * 0% = one ball expected.

If you lost track of which cup has a ball under it entirely, the odds are 33.3% under each cup.
1*33.3% + 1*33.3% + 1*33.3% = one ball expected.

But what you're describing is being confident the ball is under one cup, but also remaining uncertain if there is a ball under each of the other cups.
1*100% + 1*33.3% + 1*33.3% = 1.67 balls expected.

The game as I see it has five shells, and we've already picked one up - it had -22% under it. Now there are 4 more left and you need them to add to at least 0 at the end.

There's a Demolition Man joke about knowing how to use the three seashells in there somewhere. . .

[mistymoney]

And again, it's not trading one for the other.  It's getting rid of one for the possibility you *might* have to do the other, for a while.

I think that is true of a general retirement, currently 2022 is looking very much like it could be in th 5% of 4%WR fails, so that possibility is much more of thing.

I think you're double counting risk a bit here.

Scenario 1: we don't know which years will fail until they do. In this case there is a 4-5% chance you end up needing to work at some point after retirement (based on cFireSim results, less if we use different datasets like the original trinity study).

Scenario 2: We know which years will fail. In this case a person retired right at the start of 2022 with exactly 25x their expenses will need to work at least a little sometime in the next three decades with 100% certainty and people who retired at the start of 2021, 2020, 2019, 2018, etc have a 0% change of needing to work at all in the next three decades.

But if you add additional concentrated risk for 2022 without reducing the background risk for all years that are not 2022 the same failures get counted twice and you end up seeing the choice to retire and enjoy your life as twice as risky as it actually is.

What do you see as "adding additional concentrated risk"? And why are 20, 19, and 18 put at 0% for failure?

This story is still playing out. bear/trough could be done and market prepping for the next bull within 6 months, or the market could drop another 30% and chaos reigns as capitulation dominoes through markets, or it could just go sideways for 4-5 years. Maybe a decade? Party like it's 1969.......

In any scenario, this is a classic case of SORR, and if you still think that a 5% fail possibility for a retirement simulation in Jan 2022 is still just a 5% fail....

ok?

I just disagree.

Let's start with an agreed upon assumption (whether it's actually true or false): 5% of start dates with a 4% withdrawal rate end in failure.

If failure years look the same as any other year, any year has a 5% risk of failure.

If failure years look completely different from other years like 2022 might have a 100% risk of failure and years that don't look like 2022 might have a 0% risk of failure.

There are intermediates here. Perhaps after 8 months we can project with 50% certainty, an 2022 has a 50% risk of failure and years that don't look like 2022 have a 2.5% risk of failure.

But if you treat years like 2022 (and maybe 2009, and 2000, and 1972, and so on) as having an increase risk of failure without also decreasing your baseline assessment of risk in other years that don't have major market declines and/or inflationary spikes, that means you're making decisions about how to live your life based on an overall risk of retiring with exactly 25x expenses of ~10% which is more than twice as high. That is going to distort your thinking and push you to spend more of your life doing stuff that doesn't make you happy.

What you are advocating sounds like the performance of year one has no bearing on the eventual sucess or failure of that 30 year horizon. That is an assumption, and one I don't share.

Where I would place the question is - year one had the stock market drop 22%. What is the chance of success over the next 29 years?

So I don't think we will ever agree as we look at the question very differently. I feel like you are completely discounting the available data thus far in year 1. It isn't the way I would look at it.

[AlanStache]

...
So then why would you be willing to work far more hours for low pay in the future?  I can run a quick calculation and OMY at my current job is worth at least 5, possibly 10 years income from a low-skill job...  Plus I guess I get enough respect and autonomy (especially in the current flexible work environment) that I can run errands whenever I need to during the week.  Sure I don't have 100% freedom yet, but having the possibility of needing to work in the future doesn't sound very free to me either.

As Malcat points out though, I know I'm fortunate to have found a great job that I'm not in a rush to flee from.  If I were coming up on 40 instead of 50, I'd be more than happy to put in another 10 years...

It all comes down to an expected value problem.

Without OMY say I think I have a 90% chance of never needing to work again - great. 
Option 1: OMY and take the odds to 95%
Option 2: RE now and roll a pentagonal trapezohedron, if you roll a 1, then you need to go make some money at some point in "FIRE"
Option 3: RE now and maybe find something fun to do that makes a little money if you want or dont and take your chance with the pentagonal trapezohedron.

Everyone will differ on how they decide between option 1, 2 and 3.

I want to question your math, and I think you are just spitballing but checking on that. I think that the effect of OMY under most situations would raise 90 to a lot more than 95%. One less year to pay, one more year of contributions, growth, SS wages, etc. Seems like OMY would provide a lot of cushion....

you know, if the market wasn't sinking like a mid-weight stone....

Correct I just made the numbers up.  To busy looking up what a 10 sided die is called ...
I should have specified the lack of math.
But any uncertainty with "this time its different" should be baked into the top line 90% number.  (but I have not really read maizes math posts yet)
 

[maizefolk]

What you are advocating sounds like the performance of year one has no bearing on the eventual sucess or failure of that 30 year horizon. That is an assumption, and one I don't share.

Where I would place the question is - year one had the stock market drop 22%. What is the chance of success over the next 29 years?

So I don't think we will ever agree as we look at the question very differently. I feel like you are completely discounting the available data thus far in year 1. It isn't the way I would look at it.

No, I'm really not advocating that which is why I'm continuing to respond to you. You're arguing with a position I don't hold.

I'm saying that in any model where a bad first year increases the risk of failure must also take into account that absence of bad returns in the first year decreases the risk of failure.

20% of Americans are bald or balding. Almost all of them (but not entirely) are men. In this case if we know that someone is a man we know that their risk of being bald is elevated (about 40% of adult men in American are balding close to 2x the overall average "risk" for a person in the USA). But that same information -- that if we know someone is a man their odds of being bald are higher than overall population level averages would suggest -- is also telling us that if someone is not a man, their odds of being bald are much less than the 20% average for the population as a whole.

[RWTL]

A simpler example to show the issue:

Imagine you're playing an honest version of the shell game. There are three cups and under one of them is a ball that you want to find to win the game.



If you know exactly which cup the ball is under, the odds of a ball under that cup is 100% and under the other two is 0%.
1*100% + 1*0% + 1 * 0% = one ball expected.

If you lost track of which cup has a ball under it entirely, the odds are 33.3% under each cup.
1*33.3% + 1*33.3% + 1*33.3% = one ball expected.

But what you're describing is being confident the ball is under one cup, but also remaining uncertain if there is a ball under each of the other cups.
1*100% + 1*33.3% + 1*33.3% = 1.67 balls expected.

This thread has so many different topics in it.  I may have to break out an old statistics textbook to stay relevant.

[mistymoney]

What you are advocating sounds like the performance of year one has no bearing on the eventual sucess or failure of that 30 year horizon. That is an assumption, and one I don't share.

Where I would place the question is - year one had the stock market drop 22%. What is the chance of success over the next 29 years?

So I don't think we will ever agree as we look at the question very differently. I feel like you are completely discounting the available data thus far in year 1. It isn't the way I would look at it.

No, I'm really not advocating that which is why I'm continuing to respond to you. You're arguing with a position I don't hold.

I'm saying that in any model where a bad first year increases the risk of failure must also take into account that absence of bad returns in the first year decreases the risk of failure.

I honestly don't know what you are trying to get at. I am talking about the SORR that are generally thought to be concentrated in the first 5 years. Year 1 with negative stocks, negative bonds and high inflation seems like a trifecta of increased risk. You think differently, and I certainly wish you well. And not like I'm so kind, but a return to great markets will be great for me too!

I haven't run or seen others do conditional probabilities on likely outcomes given different year 1 results. I don't even know how useful that would be as every market is unque, and it has been stated earlier this thread. How many beginning years had this makeup? According to one graphic, only 3, and I don't think that included the high inflationary forces.

But an absence of bad returns year 1 is not the same as good returns, so as long withdrawals exceed 4% there is increasing risk. So if year 1 results are 0, year 2 withdrawals will exceed 4% - risk is increased. if Year 1 returns are 2%, year 2 withdrawals will still exceed 4%. If year 1 is higher positive - 10% increase as it kind of usual for the market, then in that case year 2 withdrawals would be less than 4%, and there risk is decreased. And this discounts any inflationary pressures to withdraw more.

If there are models that look at conditional modeling following certain early market moves, I'd be interested to see. But again - I think the data set is too limited to be super informative on the likely fail rates, and the actual future outcomes could give a us a broad new range of market behavior to add into the mix.

[mistymoney]

but sp500 is up nearly 2.5%.....so.....who knows!

[maizefolk]

I honestly don't know what you are trying to get at. I am talking about the SORR that are generally thought to be concentrated in the first 5 years. Year 1 with negative stocks, negative bonds and high inflation seems like a trifecta of increased risk. You think differently, and I certainly wish you well. And not like I'm so kind, but a return to great markets will be great for me too!

This is the second or third time you've said I "think differently" about negative stock and bond returns and higher inflation increasing risk. I will repeat again that this this not a true statement. Please accept that I know what I am saying well enough to understand that it is NOT this. Once you accept what I'm not saying, it will be a lot easier to understand what I am saying. 

But an absence of bad returns year 1 is not the same as good returns, so as long withdrawals exceed 4% there is increasing risk.

This is actually a great summation of where you're running into problems:

Whatever our starting assessment of the risk of failure, any A that increases risk relative to the starting point requires that not-A decreases risk relative to that same starting starting point.

This is a very important (and yes non-intuitive) concept to grasp in trying to make any decisions in an uncertain and probabilistic world.

[mistymoney]

I honestly don't know what you are trying to get at. I am talking about the SORR that are generally thought to be concentrated in the first 5 years. Year 1 with negative stocks, negative bonds and high inflation seems like a trifecta of increased risk. You think differently, and I certainly wish you well. And not like I'm so kind, but a return to great markets will be great for me too!

This is the second or third time you've said I "think differently" about negative stock and bond returns and higher inflation increasing risk. I will repeat again that this this not a true statement. Please accept that I know what I am saying well enough to understand that it is NOT this. Once you accept what I'm not saying, it will be a lot easier to understand what I am saying. 

But an absence of bad returns year 1 is not the same as good returns, so as long withdrawals exceed 4% there is increasing risk.

This is actually a great summation of where you're running into problems:

Whatever our starting assessment of the risk of failure, any A that increases risk relative to the starting point requires that not-A decreases risk relative to that same starting starting point.

This is a very important (and yes non-intuitive) concept to grasp in trying to make any decisions in an uncertain and probabilistic world.

I disagree with your assumptions. Let's leave it at that.

[clifp]

I honestly don't know what you are trying to get at. I am talking about the SORR that are generally thought to be concentrated in the first 5 years. Year 1 with negative stocks, negative bonds and high inflation seems like a trifecta of increased risk. You think differently, and I certainly wish you well. And not like I'm so kind, but a return to great markets will be great for me too!

I think many of us are arguing past each other in this thread.  It is a sequence of returns (plural) risk, so I don't think we have enough data from single year even as ugly as 2022 that class of 2022 is likely to fail.   The problem for us class of 2000 retires, was not the dot com bear market of 2000-2003,it was that bull market of 2004-2008 just barely exceeded the peak of 2000. The scary part was actually the great recession of 2008/9.  This bear market is likely to seal the fate of class of 2000.  I suspect that the bear market of 2027-2029 if it happens will be the killer.

[mistymoney]

I honestly don't know what you are trying to get at. I am talking about the SORR that are generally thought to be concentrated in the first 5 years. Year 1 with negative stocks, negative bonds and high inflation seems like a trifecta of increased risk. You think differently, and I certainly wish you well. And not like I'm so kind, but a return to great markets will be great for me too!

I think many of us are arguing past each other in this thread.  It is a sequence of returns (plural) risk, so I don't think we have enough data from single year even as ugly as 2022 that class of 2022 is likely to fail.

Oh - I definitely agree with that! Anything could happen - and starting at any moment! Which is why market timing is such a nono!

  The problem for us class of 2000 retires, was not the dot com bear market of 2000-2003,it was that bull market of 2004-2008 just barely exceeded the peak of 2000. The scary part was actually the great recession of 2008/9.  This bear market is likely to seal the fate of class of 2000.  I suspect that the bear market of 2027-2029 if it happens will be the killer.

By "this bear" you mean in 2022? I guess I wasn't fully registering this as an "official" bear as yet but I guess it is. That does seem tough given the history of market returns from 2000. Hope you personally are doing ok through it, at least.

I think cfiresim shows the partial trajectories, although I didn't really look at those. Going to correct that now.

ETA: nope, just saw 80 for last cohorts? am I missing something?

[maizefolk]

I disagree with your assumptions. Let's leave it at that.

You are assuming I'm saying things that I'm not. I'm happy to leave it at that.

[Wolfpack Mustachian]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

[Metalcat]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

This is something I touched on in another thread.

When making plans, you have to also account for the probability of success. If you only account for the probability of failure, you can't actually make balanced, responsible decisions.

I'm all about accounting for risk, I'm about as financially risk averse as people come. Probably far more so than the vast majority of people in this thread. However, being risk averse should not equal ignoring the probability of success.

My probability of being successful at being able to make money doing fun, part time work that I enjoy is tremendously high. By accepting that probability of success, I'm able to generate a much lower risk approach than if I failed to account for that probability, as I wouldn't have been willing to make the 5 figure, 2.5 year investment in upskilling.

Ignoring strengths and probability of success does not make a plan safer. It creates a whole new set of risks, and inaccurately skews the parameters of decision making.

I didn't used to think this way until I got into business consulting and over and over again saw people fuck themselves by failing to account for the probability of positive outcomes, and therefore under investing in them.

You can be very conservative while also responsibly accounting *accurately* for strengths and highly probable positive outcomes. That allows for more responsible planning.

It's one thing to say you don't want to depend on a positive outcome, it's another thing to fail to account for value of that probability.

[AlanStache]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

Maybe think about it as SORR but with bad luck.  For the woman who funded a kid(s) grad degree, maybe she would have been ok doing that as she intended to down size her home but 08 put her under water, or she was invested in Enron or some other bad life event happened.  You dont hear about the stories here there was a modest hardship, someone adapted and things were ok, you here about the failures.  As Melcat mentioned you cant plain for worst cast after worst case after worst case, this would lead you to being a multi millionaire living under a bridge because maybe bad things will happen. 

One of the other threads on here is a guy getting ready to retire soon and start a small business, very smart, lots of savings but I am sure you could come up with a scenario where he gets into trouble one bad bit of luck at a time.  In all likely hood he will be fine, but if he fails the headline will be that he gave up a good job poured lots of cash in to a bad business then could not cover XYZ other emergency and now has to live with family. 

I work in aviation and most loss of life accidents are not caused by one bad thing but multiple things failing or multiple bits of bad luck.  You dont hear about the countless accidents-that-did-not-happen because the pilot took corrective action and a subsequent bad thing did not also happen.  If we expected only bad things to happen and ignored the probability of them then we would never get on an airplane. 

[mistymoney]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

So in the 2022 situation - when would the current trend of economic data indicate a need for a change? Our cohort here has reported building in multiple safeguards, but for the "average" 25Xexpenses/4% WR - costs are up and the kitty is down - is it time to "know" yet - or when would that be?

[Sandi_k]

Folks, we're getting into silliness. The bald truth here:

If SORR is an issue, for most people on this forum, they would have to get a job making $20k per year to offset a $500k loss of investments. If married, the spouse does the same thing.

That will be literally the easiest money I will have made in 30 years. I can work part time at Petsmart or Target and make that kind of cash. I could work 10 hours per week at any secretarial job and make that cash.

I will not delay retirement and control of my life and schedule over $20k per year.

[Metalcat]

Folks, we're getting into silliness. The bald truth here:

If SORR is an issue, for most people on this forum, they would have to get a job making $20k per year to offset a $500k loss of investments. If married, the spouse does the same thing.

That will be literally the easiest money I will have made in 30 years. I can work part time at Petsmart or Target and make that kind of cash. I could work 10 hours per week at any secretarial job and make that cash.

I will not delay retirement and control of my life and schedule over $20k per year.

Yep, which is why the preference to work more years vs being willing to pick up work later on is primarily a *lifestyle* choice, not a mathematical one.

Some people would rather shave their eyeballs than contemplate working service jobs at low wages compared to sticking in their cushy job for a few more years. Others have the reverse reaction.

People are complex.

It's very, abundantly obvious that the folks who staunchly insist that OMY is the only reasonable option are folks who really don't mind their current jobs.

That's a lifestyle reality, not a mathematical one.

It's super awesome when your personal life preferences happen to be financially beneficial. I don't want kids, that's an enormous financial benefit to me, but I don't go walking around insisting to everyone that not having kids is the only mathematically supportable financial choice.

OMY vs picking up part time work vs cutting expenses are all lifestyle options that people can variably choose for managing their finances based on the complex, individual factors that make up every complex lifestyle choice we all make regularly.

As I said very, very early on in this seriously bizarre thread: the best time to leave your job is when the risks of staying outweigh the risks of leaving.

The factors that make up those risks are far more dynamic than just simple math. If they weren't, then everyone would just keep working until they drop dead. At work.

[mistymoney]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

This is something I touched on in another thread.

When making plans, you have to also account for the probability of success. If you only account for the probability of failure, you can't actually make balanced, responsible decisions.

I'm all about accounting for risk, I'm about as financially risk averse as people come. Probably far more so than the vast majority of people in this thread. However, being risk averse should not equal ignoring the probability of success.

My probability of being successful at being able to make money doing fun, part time work that I enjoy is tremendously high. By accepting that probability of success, I'm able to generate a much lower risk approach than if I failed to account for that probability, as I wouldn't have been willing to make the 5 figure, 2.5 year investment in upskilling.

Ignoring strengths and probability of success does not make a plan safer. It creates a whole new set of risks, and inaccurately skews the parameters of decision making.

I didn't used to think this way until I got into business consulting and over and over again saw people fuck themselves by failing to account for the probability of positive outcomes, and therefore under investing in them.

You can be very conservative while also responsibly accounting *accurately* for strengths and highly probable positive outcomes. That allows for more responsible planning.

It's one thing to say you don't want to depend on a positive outcome, it's another thing to fail to account for value of that probability.

One note I'd like to make here is on people's living situations and social as opposed to financial safety nets. I beleive you are part of a high acheiving couple, malcat - each with income streams, savings, and retirement income (like the us soc sec or pensions?).

In contrast, I am on my own, and I have been on my own for quite some time. I did not have the benefit of a coparent to help with raising the kids nor any child support. I have no pensions, and surprisingly to me, my projected soc security is still modest at best. I have also become somewhat socially isolated over time and I don't have any close family ties.

I have one shot to get this right, and I cannot make a mistake! I don't think someone in a couple with 2 earners, and 2 sources of soc sec and/or pensions can understand the difficulty. Even as a singleton, I don't think someone who has people in their life that they can count on to help out or pull together in tough times can understand.

If I take that chance you advocate - sure, I have high level skills, I have a nicely paid side gig now, if I double the side gig (I don't know how I could, but I could start trolling for clients....) I'd have maybe a 2% WR based on current market value and I would likely come through the bear ok. But if the economy and the job market becomes more dire, and those PT well paying gigs evaporate while the stock market remains stagnated and inflationary pressure continue over the next few years - everything I've cobbled together over the past 20 years could evaporate relatively quickly.

While I agree that the chance of success should not be ignored, (and I'm not saying that I'd never take that chance to quit! But right now, I'd rather hang on for a little while longer to the day job and sit on the sidelines. Things could change!), the consequences of a fail would be much more devasting to someone in my position.

[Metalcat]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

This is something I touched on in another thread.

When making plans, you have to also account for the probability of success. If you only account for the probability of failure, you can't actually make balanced, responsible decisions.

I'm all about accounting for risk, I'm about as financially risk averse as people come. Probably far more so than the vast majority of people in this thread. However, being risk averse should not equal ignoring the probability of success.

My probability of being successful at being able to make money doing fun, part time work that I enjoy is tremendously high. By accepting that probability of success, I'm able to generate a much lower risk approach than if I failed to account for that probability, as I wouldn't have been willing to make the 5 figure, 2.5 year investment in upskilling.

Ignoring strengths and probability of success does not make a plan safer. It creates a whole new set of risks, and inaccurately skews the parameters of decision making.

I didn't used to think this way until I got into business consulting and over and over again saw people fuck themselves by failing to account for the probability of positive outcomes, and therefore under investing in them.

You can be very conservative while also responsibly accounting *accurately* for strengths and highly probable positive outcomes. That allows for more responsible planning.

It's one thing to say you don't want to depend on a positive outcome, it's another thing to fail to account for value of that probability.

One note I'd like to make here is on people's living situations and social as opposed to financial safety nets. I beleive you are part of a high acheiving couple, malcat - each with income streams, savings, and retirement income (like the us soc sec or pensions?).

In contrast, I am on my own, and I have been on my own for quite some time. I did not have the benefit of a coparent to help with raising the kids nor any child support. I have no pensions, and surprisingly to me, my projected soc security is still modest at best. I have also become somewhat socially isolated over time and I don't have any close family ties.

I have one shot to get this right, and I cannot make a mistake! I don't think someone in a couple with 2 earners, and 2 sources of soc sec and/or pensions can understand the difficulty. Even as a singleton, I don't think someone who has people in their life that they can count on to help out or pull together in tough times can understand.

If I take that chance you advocate - sure, I have high level skills, I have a nicely paid side gig now, if I double the side gig (I don't know how I could, but I could start trolling for clients....) I'd have maybe a 2% WR based on current market value and I would likely come through the bear ok. But if the economy and the job market becomes more dire, and those PT well paying gigs evaporate while the stock market remains stagnated and inflationary pressure continue over the next few years - everything I've cobbled together over the past 20 years could evaporate relatively quickly.

While I agree that the chance of success should not be ignored, (and I'm not saying that I'd never take that chance to quit! But right now, I'd rather hang on for a little while longer to the day job and sit on the sidelines. Things could change!), the consequences of a fail would be much more devasting to someone in my position.

K...I feel like @maizefolk now

I literally never advocated taking any chances.

I don't even know how you got that from my post. Realistically assessing the likelihood of success does not equal taking more risk. I don't think I can make that any clearer.

Each person needs to assess their *overall* risks.

Obviously my risk assessment is going to be different from yours because we have different risk factors. That's my ENTIRE point.

Never have I been saying that people should emulate my choices, I've only given my case as an example of how my factors are *different* from others, therefore the most risk averse option for *me* is very different from what it would be for someone who has OMY as their best option.

I can't believe I have to say this again, because I literally have said it over and over, but OMY is the best choice for some people. Not for others.

Each person needs to realistically look at their probabilities of failures and successes in order to know what their best options are.

I FEEL LIKE I'M TAKING CRAZY PILLS!

[mistymoney]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

This is something I touched on in another thread.

When making plans, you have to also account for the probability of success. If you only account for the probability of failure, you can't actually make balanced, responsible decisions.

I'm all about accounting for risk, I'm about as financially risk averse as people come. Probably far more so than the vast majority of people in this thread. However, being risk averse should not equal ignoring the probability of success.

My probability of being successful at being able to make money doing fun, part time work that I enjoy is tremendously high. By accepting that probability of success, I'm able to generate a much lower risk approach than if I failed to account for that probability, as I wouldn't have been willing to make the 5 figure, 2.5 year investment in upskilling.

Ignoring strengths and probability of success does not make a plan safer. It creates a whole new set of risks, and inaccurately skews the parameters of decision making.

I didn't used to think this way until I got into business consulting and over and over again saw people fuck themselves by failing to account for the probability of positive outcomes, and therefore under investing in them.

You can be very conservative while also responsibly accounting *accurately* for strengths and highly probable positive outcomes. That allows for more responsible planning.

It's one thing to say you don't want to depend on a positive outcome, it's another thing to fail to account for value of that probability.

One note I'd like to make here is on people's living situations and social as opposed to financial safety nets. I beleive you are part of a high acheiving couple, malcat - each with income streams, savings, and retirement income (like the us soc sec or pensions?).

In contrast, I am on my own, and I have been on my own for quite some time. I did not have the benefit of a coparent to help with raising the kids nor any child support. I have no pensions, and surprisingly to me, my projected soc security is still modest at best. I have also become somewhat socially isolated over time and I don't have any close family ties.

I have one shot to get this right, and I cannot make a mistake! I don't think someone in a couple with 2 earners, and 2 sources of soc sec and/or pensions can understand the difficulty. Even as a singleton, I don't think someone who has people in their life that they can count on to help out or pull together in tough times can understand.

If I take that chance you advocate - sure, I have high level skills, I have a nicely paid side gig now, if I double the side gig (I don't know how I could, but I could start trolling for clients....) I'd have maybe a 2% WR based on current market value and I would likely come through the bear ok. But if the economy and the job market becomes more dire, and those PT well paying gigs evaporate while the stock market remains stagnated and inflationary pressure continue over the next few years - everything I've cobbled together over the past 20 years could evaporate relatively quickly.

While I agree that the chance of success should not be ignored, (and I'm not saying that I'd never take that chance to quit! But right now, I'd rather hang on for a little while longer to the day job and sit on the sidelines. Things could change!), the consequences of a fail would be much more devasting to someone in my position.

K...I feel like @maizefolk now

I literally never advocated taking any chances.

I don't even know how you got that from my post. Realistically assessing the likelihood of success does not equal taking more risk. I don't think I can make that any clearer.

Each person needs to assess their *overall* risks.

Obviously my risk assessment is going to be different from yours because we have different risk factors. That's my ENTIRE point.

Never have I been saying that people should emulate my choices, I've only given my case as an example of how my factors are *different* from others, therefore the most risk averse option for *me* is very different from what it would be for someone who has OMY as their best option.

I can't believe I have to say this again, because I literally have said it over and over, but OMY is the best choice for some people. Not for others.

Each person needs to realistically look at their probabilities of failures and successes in order to know what their best options are.

I FEEL LIKE I'M TAKING CRAZY PILLS!

ok - so question. Why is it ok for you to talk about your unique situation and why you made your decisions, but if I talk about my unique situation, its crazy pills?

[Metalcat]

]

ok - so question. Why is it ok for you to talk about your unique situation and why you made your decisions, but if I talk about my unique situation, its crazy pills?

Of course you can talk about your situation. What I take issue with is you categorizing what I've said as recommending taking risks that I never recommended.

You literally phrased it as me suggesting that you do something that isn't right for your risk profile and I never ever suggested anything of the sort.

ETA: sorry, I'm not frustrated primarily with you, I'm just frustrated

[maizefolk]

You can absolutely talk about your own situation. It's when you start talking about what other people are saying or advocating and then say they are advocating for things that they never said that you run into trouble.

In your entire post the key line is this one:

If I take that chance you advocate - sure, I have high level skills, I have a nicely paid side gig now, if I double the side gig (I don't know how I could, but I could start trolling for clients....) I'd have maybe a 2% WR based on current market value and I would likely come through the bear ok. But if the economy and the job market becomes more dire, and those PT well paying gigs evaporate while the stock market remains stagnated and inflationary pressure continue over the next few years - everything I've cobbled together over the past 20 years could evaporate relatively quickly.

With those bolded words you are putting a position into Malcat's mouth that they never wrote.

[Metalcat]

What I said was to not ignore the probability of success. In NO WAY does that mean ignoring the magnitude of risk.

Where people make mistakes is focusing only on one and not the other, not balancing them.

[Wolfpack Mustachian]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

This is something I touched on in another thread.

When making plans, you have to also account for the probability of success. If you only account for the probability of failure, you can't actually make balanced, responsible decisions.

I'm all about accounting for risk, I'm about as financially risk averse as people come. Probably far more so than the vast majority of people in this thread. However, being risk averse should not equal ignoring the probability of success.

My probability of being successful at being able to make money doing fun, part time work that I enjoy is tremendously high. By accepting that probability of success, I'm able to generate a much lower risk approach than if I failed to account for that probability, as I wouldn't have been willing to make the 5 figure, 2.5 year investment in upskilling.

Ignoring strengths and probability of success does not make a plan safer. It creates a whole new set of risks, and inaccurately skews the parameters of decision making.

I didn't used to think this way until I got into business consulting and over and over again saw people fuck themselves by failing to account for the probability of positive outcomes, and therefore under investing in them.

You can be very conservative while also responsibly accounting *accurately* for strengths and highly probable positive outcomes. That allows for more responsible planning.

It's one thing to say you don't want to depend on a positive outcome, it's another thing to fail to account for value of that probability.

This is very interesting. I don't have anything to add, but I'm going to ponder on this.

[Wolfpack Mustachian]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

So in the 2022 situation - when would the current trend of economic data indicate a need for a change? Our cohort here has reported building in multiple safeguards, but for the "average" 25Xexpenses/4% WR - costs are up and the kitty is down - is it time to "know" yet - or when would that be?

For a person who retired anytime in the past year or two on a true 4% WR with no buffer or contingency plans, the time is certainly now to reevaluate and probably go back to work. I don't think it's even debatable.

That being said, if you retired on 4 or even 4.5%, but, for example, you can reduce it down to a 3% WR by not taking some trips and living more lean your first few years, and you have a 3 year cash cushion so you don't have to sell anything for years, etc etc, maybe not.

[Metalcat]

This is very interesting. I don't have anything to add, but I'm going to ponder on this.

Think of it this way, how successful would many of us be if we didn't plan for gains from index funds?

How fucked would our plans be compared to someone who reasonably anticipates an average of 7% returns over time? How would you plan? Probably not very effectively.

You HAVE TO account for the probability of success in planning. Failing to do so can actually be more devastating that under estimating failure.

I will repeat for the sake of clarity that this has *nothing* to do with being less conservative and taking more risk, it means properly assessing risk.

I have seriously seen people absolutely screw themselves in business by not accounting properly for the reasonable possibility of success. Think of a business that drastically underestimates its growth and fails to expand properly.

Now, of course life is not business, and the forces and risks are very different, but the fact remains that you need to have a clear sense of what is likely to go well in order to hedge appropriately for what can go wrong.

I cannot state it clearer that this is *not* about taking more risk, it's actually about hedging risks appropriately.

[Wolfpack Mustachian]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

Maybe think about it as SORR but with bad luck.  For the woman who funded a kid(s) grad degree, maybe she would have been ok doing that as she intended to down size her home but 08 put her under water, or she was invested in Enron or some other bad life event happened.  You dont hear about the stories here there was a modest hardship, someone adapted and things were ok, you here about the failures.  As Melcat mentioned you cant plain for worst cast after worst case after worst case, this would lead you to being a multi millionaire living under a bridge because maybe bad things will happen. 

One of the other threads on here is a guy getting ready to retire soon and start a small business, very smart, lots of savings but I am sure you could come up with a scenario where he gets into trouble one bad bit of luck at a time.  In all likely hood he will be fine, but if he fails the headline will be that he gave up a good job poured lots of cash in to a bad business then could not cover XYZ other emergency and now has to live with family. 

I work in aviation and most loss of life accidents are not caused by one bad thing but multiple things failing or multiple bits of bad luck.  You dont hear about the countless accidents-that-did-not-happen because the pilot took corrective action and a subsequent bad thing did not also happen.  If we expected only bad things to happen and ignored the probability of them then we would never get on an airplane.

I certainly agree on the end of over emphasizing bad things as a risk. I do see what you're saying about SORR and bad luck working together.

It sounds like what you're talking about is a series of failures that compound. I agree this is a risk, but I would say that with each successive compounding failure that altogether mess things up, you also increase your chances of recognizing and reacting to it. Maybe you hit a reasonably bad year of stocks right after you retire. Then you decide you want to  pay for a kids 4 year degree. Now you've had two chances to, in real time, step back and say, I need to address this now in some way. You can address things in this way as they come, imo.

[mspym]

Folks, we're getting into silliness. The bald truth here:

If SORR is an issue, for most people on this forum, they would have to get a job making $20k per year to offset a $500k loss of investments. If married, the spouse does the same thing.

That will be literally the easiest money I will have made in 30 years. I can work part time at Petsmart or Target and make that kind of cash. I could work 10 hours per week at any secretarial job and make that cash.

I will not delay retirement and control of my life and schedule over $20k per year.

Bingo. I could walk into a job that covered my expenses because they are lower than my country’s minimum wage. But I don’t need to work full-time because it turns out that proofreading one (1) manuscript a month is enough to offset market drop and is tremendous fun for me.

In contrast, my old project sounded me out about returning and despite that being the best project I have been on, with a fantastic crew of people and a day rate that matches my manuscript rate, I could not refuse fast enough. I’m done with that.

[AlanStache]

...
I certainly agree on the end of over emphasizing bad things as a risk. I do see what you're saying about SORR and bad luck working together.

It sounds like what you're talking about is a series of failures that compound. I agree this is a risk, but I would say that with each successive compounding failure that altogether mess things up, you also increase your chances of recognizing and reacting to it. Maybe you hit a reasonably bad year of stocks right after you retire. Then you decide you want to  pay for a kids 4 year degree. Now you've had two chances to, in real time, step back and say, I need to address this now in some way. You can address things in this way as they come, imo.

bold: I was not thinking of those two as as distinct, I was thinking of a Sequence Of Bad Luck in life and/or investments.

I am not a trained economist so I tend to not think of people as rational optimization machines :-)  Expecting everyone to be a good little mmm loving STEM professional will leave you disappointed.   I can certainly look back and see things I should have done to be in a better position today that I even sort of knew I should have done in the moment but did not get off my fat a-- and do.  Wolf maybe you would be better at seeing the bad things happening in real time and taking action - if so great you will do well.  A 1 in a million event in someone's life will happen every day in to someone in the US and those are the stories we will hear about, the stories about people who did take action and did correct there direction in life will not get posted in financial forums.  We here are a self selected sample that will probably take action earlier and harder than the general population, most people are "lucky" if they learn to pay off the lowest balance credit card first. 

[mspym]

But the average joe who can’t work out how to pay off a credit card first is unlikely to track expenses let alone also save up 25x expenses so yeah I do think people who’ve made the decision to pull the cord are also likely to keep things in check and one doesn’t have to be a STEM engineer to do this. I sure wasn’t one. It’s a false option.

[clifp]

OMY vs picking up part time work vs cutting expenses are all lifestyle options that people can variably choose for managing their finances based on the complex, individual factors that make up every complex lifestyle choice we all make regularly.

As I said very, very early on in this seriously bizarre thread: the best time to leave your job is when the risks of staying outweigh the risks of leaving.

The factors that make up those risks are far more dynamic than just simple math. If they weren't, then everyone would just keep working until they drop dead. At work.

We are in 100% agreement, it is complicated and everyone situation is unique and all three strategies are viable.

As much as caution people that 4% was not a very safe withdrawal rate for people taking early retirement the last couple of years. (It maybe ok in 2023). I want to be equally forceful that life is too short to do a job you hate.

 I'm saying it is very likely that most money you will make is in the job you have right before your retire.  Also, the most leverage you have to get negotiate a higher salary is when you are currently working.  Plus for some people the 30-90 days after you quit, and your old company realized how screwed they are without you.

[Villanelle]

...
None of those will pay especially well.  But all of them sound less miserable than another year or several spent full-time behind a desk. 
...

Whenever I hear people say some version of this, I wonder what the heck kind of hellacious job they had!  I'm still planning to leave my cushy job to find out what else is out there, but the next person that fills this position will probably feel like they hit the jackpot.  I'm envious of the young whipper snapper that follows in my footsteps, but I also hope they don't get hooked on luxury items and squander their good fortune...

I never hated my FTE.  I didn't mind it at all.  But it still ate up 40 hours of my week (more, on occasion) and I was at their mercy for planning vacations, being able to go meet a friend on a random Tuesday for lunch or to go to a special event at a museum, and being able to run errands when I wasn't competing with the rest of the M-F working worked.

Why would it have to be hellacious to think that a year less of that is better than *maybe* having to do some substitute teaching, entirely on my schedule, or walk the neighbors dogs a few times a week? Or having to do a couple more freelance writing jobs a month, from the comfort of my home, at 2am if I want to, wearing pajamas and with my dogs curled up at my feet. 

And again, it's not trading one for the other.  It's getting rid of one for the possibility you *might* have to do the other, for a while.

So then why would you be willing to work far more hours for low pay in the future?  I can run a quick calculation and OMY at my current job is worth at least 5, possibly 10 years income from a low-skill job...  Plus I guess I get enough respect and autonomy (especially in the current flexible work environment) that I can run errands whenever I need to during the week.  Sure I don't have 100% freedom yet, but having the possibility of needing to work in the future doesn't sound very free to me either.

As Malcat points out though, I know I'm fortunate to have found a great job that I'm not in a rush to flee from.  If I were coming up on 40 instead of 50, I'd be more than happy to put in another 10 years...

Because those "more hours"...
1) might never even happen.  So I'm trading a sure thing of working, for a possibility of working.  That's already an upgrade.

and 2)
The will be on my own terms.  If I'm in a walking group that meets on Tuesdays, I don't work Tuesdays.  If I want to meet my parents in Mexico the second week of March, if doesn't matter that March 31 is year end for someone. I get to claim that week and go.  And I can choose projects that I don't mind doing, like substitute teaching at a private school where I know the kids to be well-behaved, or walking dogs I know not to be asshole canines. 

I don't know if there's another different way to explain that, so if it isn't making sense to you, I think we'll just have to acknowledge that we aren't going to get to an understanding.  I can see why people would make a different choice, but that other choice makes no sense at all for me.  Even though I didn't hate working.  Because while I didn't hate my work, I love not-working a lot more than I loved working. I love strolling the trails behind my house during the weekdays when almost no one else is there (and I can feel fairly comfortable taking my reactive but not dangerous dogs).  I like going to the hardware store when it isn't crowded and I can find someone to help me is I need assistance.  I liked being able to travel with DH when he traveled for work.  (harder since we got dogs)  I like being able to visit my parents and spend more than 3 days with them, especially as they get older.  I like all those things, a lot.  And not working allows me to have them.  There is a possibility I'll have to go back to some kind of work later one, but I have a lot of relief valves I can open before then.  And if I do have to work for a while, it will be something where I can still walk and go to Lowes and visit my parents when I want to.   

That sounds much better than definitely sitting at my desk for another year.

[Metalcat]

OMY vs picking up part time work vs cutting expenses are all lifestyle options that people can variably choose for managing their finances based on the complex, individual factors that make up every complex lifestyle choice we all make regularly.

As I said very, very early on in this seriously bizarre thread: the best time to leave your job is when the risks of staying outweigh the risks of leaving.

The factors that make up those risks are far more dynamic than just simple math. If they weren't, then everyone would just keep working until they drop dead. At work.

We are in 100% agreement, it is complicated and everyone situation is unique and all three strategies are viable.

As much as caution people that 4% was not a very safe withdrawal rate for people taking early retirement the last couple of years. (It maybe ok in 2023). I want to be equally forceful that life is too short to do a job you hate.

 I'm saying is very likely that most money you will make is in the job you have right before your retire.  Also, the most leverage you have to get negotiate a higher salary is when you are currently working.  Plus for some people the 30-90 days after you quit, and your old company realized how screwed they are without you.

Depends on your career, but yeah, I think the vast majority of people are well aware of this and account for it when they sack-up and actually leave their careers.

Leaving a career is a HUGE lifestyle step to take. I don't think anyone does it lightly. Even I didn't do it lightly and I medically had to. I still stuck it out for a year longer than I medically should have, which caused huge, permanent damage.

Leaving a career is HARD. Leaving a high paying, elite career you worked your ass off to get is REALLY HARD.

I just don't think many people retire early from the peak of their career lightly, and I certainly don't think they do it blindly following the 4% rule.

I'm just not convinced that this mythical person who saves exactly 25X their estimated savings ups and leaves a great career with no real analysis and no backup plan.

I've never seen it.

[nereo]

So then why would you be willing to work far more hours for low pay in the future?  I can run a quick calculation and OMY at my current job is worth at least 5, possibly 10 years income from a low-skill job...  Plus I guess I get enough respect and autonomy (especially in the current flexible work environment) that I can run errands whenever I need to during the week.  Sure I don't have 100% freedom yet, but having the possibility of needing to work in the future doesn't sound very free to me either.

As Malcat points out though, I know I'm fortunate to have found a great job that I'm not in a rush to flee from.  If I were coming up on 40 instead of 50, I'd be more than happy to put in another 10 years...

Because those "more hours"...
1) might never even happen.  So I'm trading a sure thing of working, for a possibility of working.  That's already an upgrade.

and 2)
The will be on my own terms.  If I'm in a walking group that meets on Tuesdays, I don't work Tuesdays.  If I want to meet my parents in Mexico the second week of March, if doesn't matter that March 31 is year end for someone. I get to claim that week and go.  And I can choose projects that I don't mind doing, like substitute teaching at a private school where I know the kids to be well-behaved, or walking dogs I know not to be asshole canines. 

I don't know if there's another different way to explain that, so if it isn't making sense to you, I think we'll just have to acknowledge that we aren't going to get to an understanding.  I can see why people would make a different choice, but that other choice makes no sense at all for me.  Even though I didn't hate working.  Because while I didn't hate my work, I love not-working a lot more than I loved working. I love strolling the trails behind my house during the weekdays when almost no one else is there (and I can feel fairly comfortable taking my reactive but not dangerous dogs).  I like going to the hardware store when it isn't crowded and I can find someone to help me is I need assistance.  I liked being able to travel with DH when he traveled for work.  (harder since we got dogs)  I like being able to visit my parents and spend more than 3 days with them, especially as they get older.  I like all those things, a lot.  And not working allows me to have them.  There is a possibility I'll have to go back to some kind of work later one, but I have a lot of relief valves I can open before then.  And if I do have to work for a while, it will be something where I can still walk and go to Lowes and visit my parents when I want to.   

That sounds much better than definitely sitting at my desk for another year.

This earlier comment by EV2020 stuck with me, so I’m glad you came back to it Villanelle.
Of course I’ll start with the caveat that it’s a personal decision and several factors will come into play, and different people will find a different strategy is most optimal for them.

Both of my siblings, my wife and I have all reached similar conclusions. We all genuinely enjoy our careers, which we spent over a decade aspiring to.  For us, our take-home pay and our lifestyle are such that we can sock away roughly 30-35% each year towards retirement.  It works out that each year we work “full time” we add another half a year’s planned spending in retirement. I say “full time” because while a work-year is supposed to be 2080(ish) hours, salaried employees such as ourselves easily work 2,400 hours when you add up all the special project overtime, meeting clients and answering ‘urgent’ questions outside work and other things that bleed into our precarious work-life balance.

So why would we be willing to work more commutative hours vs simply staying in our career another year (or two)?  Because those hours are not equivalent. 

My wife and I realized quite by accident how fundamentally different things can be when we were impacted by furloughs. As much as we absolutely love our jobs they take an enormous toll on every aspect of our lives, including our health, marriage, hobbies and project, cleanliness of our homes and quality time with family. When we dropped to 4 days per week it was mind blowing how much more time and energy we had for everything else.  And at three days/week it was an entirely different universe. We no longer thought “when we have time…” because we had more waking free-time than work time. Oddly, work became something that we not only enjoyed, but we woke up on work days eager to do the thing we genuinely love to do with an enthusiasm that was blunted when it was a 40+ hour requirement.  We literally had a 4-day weekend just around the corner, every single week.

Most telling for us (and here’s where it becomes very different for each individual) the math worked out something like this. When we went to this very part time of 3 days/week we ‘lost’ quite a bit of income, both from hours worked (-40%) but also from not hitting work thresholds for contracts, which was considerable.  In total our gross wages were cut by about 60%. We ‘gained’ about 1,200 hours of work time which became our time. We also saved several thousand $ annually with our reduced commute and time to do basic things we were forced to outsource.  Also important, our taxable burden dropped to near zero as our AIG plummeted.  Largely out of necessity we couldn’t contribute hardly anything to our retirement accounts, which sucked during our accumulation years but becomes very important in this discussion.

To summarize, we lost about 2/3rds of our income when our hours went down by 40%. Critically (and through a long list of ‘savings’) we found we could meet our expenses this way, backstopped by our already considerable savings to weather ‘really bad things’..

So in the end the decision looks something like this.  Work ‘OMY’ (or two, or three…) at our current job (which we love!) or downshift and work several more years at reduce pay and severely reduced hours. To us the decision’s always favored the part-time, lower paying job.
Sure, if we worked one more year we’d pile another six-months expenses into our retirement accounts plus market gains, but it comes with a pretty heavy cost - namely another year where the dominant focus is on our job. On the other end of the spectrum, working part time met our expenses, and also came with another year’s market increase (decrease).  At this point in my financial journey the movement of the markets has a much large impact on my NW than any savings I can add even when working maximum hours.
For me personally, I’d rather work 5 years of part-time, reduced pay over another intense 1 year  fully time at my job which i love..

Put another way, those five years of working would total ~2.5x more hours than working OMY, but I’d wind up in a much better financial situation, a much healthier life situation, and I’d enjoy those hours spent working much more. And so this is being ‘baked in’ to our ER plan right now.

And while this might be completely naive, I don’t want to trade an entire year at 40 for several partial years throughout my 40s.

[BeanCounter]

Put another way, those five years of working would total ~2.5x more hours than working OMY, but I’d wind up in a much better financial situation, a much healthier life situation, and I’d enjoy those hours spent working much more. And so this is being ‘baked in’ to our ER plan right now.

And while this might be completely naive, I don’t want to trade an entire year at 40 for several partial years throughout my 40s.

This is the same conclusion I came to. I felt like if I knew I wanted to get out then why was I staying? When looking at the financial impact of OMY, it really was very minimal, and the most impactful piece was not the additional money I could save, but just not drawing anything for a year. Well, I could easily achieve that or at least mitigate that with part time work! And with so much less stress. The full time gig required much more than 40 hours, a ton of meetings that wasted my time and the weight of responsibilities that never ended. And I was never in control of my own schedule. For example when COVID hit and we were all working from home, they made me furlough my staff and increased my work load with all of the staff's deliverables. That was the last straw.

 Because of fear, of the market and losing my network etc, I took some contract gigs after 8 months of RE. The old employer asked me to come back as a contract employee. I did that for a year, part time at 3x my employed rate. I then picked up three more clients. I've been doing these contract gigs for two years and am considering stopping all of that because I'm feeling tired and stressed again and pulled in a thousand directions. Now, I have determined that if I think I should do some work, I'd prefer lower paid work like catering gigs, bartending, trader joes maybe, or some seasonal tax work for HR block etc. Anything that brings in a bit of cash but doesn't require the responsibility that causes so much stress.

Our original plan for this situation was-
 -move from 3% to 4% WD rate
 -use cash first (almost two years of cash in MM fund)
- then consider working again
but when the part time work came so easily and we are young and can't travel because of school schedules it made since to go back to work first and see how that was. but only part time!!

[mistymoney]

So then why would you be willing to work far more hours for low pay in the future?  I can run a quick calculation and OMY at my current job is worth at least 5, possibly 10 years income from a low-skill job...  Plus I guess I get enough respect and autonomy (especially in the current flexible work environment) that I can run errands whenever I need to during the week.  Sure I don't have 100% freedom yet, but having the possibility of needing to work in the future doesn't sound very free to me either.

As Malcat points out though, I know I'm fortunate to have found a great job that I'm not in a rush to flee from.  If I were coming up on 40 instead of 50, I'd be more than happy to put in another 10 years...

Because those "more hours"...
1) might never even happen.  So I'm trading a sure thing of working, for a possibility of working.  That's already an upgrade.

and 2)
The will be on my own terms.  If I'm in a walking group that meets on Tuesdays, I don't work Tuesdays.  If I want to meet my parents in Mexico the second week of March, if doesn't matter that March 31 is year end for someone. I get to claim that week and go.  And I can choose projects that I don't mind doing, like substitute teaching at a private school where I know the kids to be well-behaved, or walking dogs I know not to be asshole canines. 

I don't know if there's another different way to explain that, so if it isn't making sense to you, I think we'll just have to acknowledge that we aren't going to get to an understanding.  I can see why people would make a different choice, but that other choice makes no sense at all for me.  Even though I didn't hate working.  Because while I didn't hate my work, I love not-working a lot more than I loved working. I love strolling the trails behind my house during the weekdays when almost no one else is there (and I can feel fairly comfortable taking my reactive but not dangerous dogs).  I like going to the hardware store when it isn't crowded and I can find someone to help me is I need assistance.  I liked being able to travel with DH when he traveled for work.  (harder since we got dogs)  I like being able to visit my parents and spend more than 3 days with them, especially as they get older.  I like all those things, a lot.  And not working allows me to have them.  There is a possibility I'll have to go back to some kind of work later one, but I have a lot of relief valves I can open before then.  And if I do have to work for a while, it will be something where I can still walk and go to Lowes and visit my parents when I want to.   

That sounds much better than definitely sitting at my desk for another year.

This earlier comment by EV2020 stuck with me, so I’m glad you came back to it Villanelle.
Of course I’ll start with the caveat that it’s a personal decision and several factors will come into play, and different people will find a different strategy is most optimal for them.

Both of my siblings, my wife and I have all reached similar conclusions. We all genuinely enjoy our careers, which we spent over a decade aspiring to.  For us, our take-home pay and our lifestyle are such that we can sock away roughly 30-35% each year towards retirement.  It works out that each year we work “full time” we add another half a year’s planned spending in retirement. I say “full time” because while a work-year is supposed to be 2080(ish) hours, salaried employees such as ourselves easily work 2,400 hours when you add up all the special project overtime, meeting clients and answering ‘urgent’ questions outside work and other things that bleed into our precarious work-life balance.

So why would we be willing to work more commutative hours vs simply staying in our career another year (or two)?  Because those hours are not equivalent. 

My wife and I realized quite by accident how fundamentally different things can be when we were impacted by furloughs. As much as we absolutely love our jobs they take an enormous toll on every aspect of our lives, including our health, marriage, hobbies and project, cleanliness of our homes and quality time with family. When we dropped to 4 days per week it was mind blowing how much more time and energy we had for everything else.  And at three days/week it was an entirely different universe. We no longer thought “when we have time…” because we had more waking free-time than work time. Oddly, work became something that we not only enjoyed, but we woke up on work days eager to do the thing we genuinely love to do with an enthusiasm that was blunted when it was a 40+ hour requirement.  We literally had a 4-day weekend just around the corner, every single week.

Most telling for us (and here’s where it becomes very different for each individual) the math worked out something like this. When we went to this very part time of 3 days/week we ‘lost’ quite a bit of income, both from hours worked (-40%) but also from not hitting work thresholds for contracts, which was considerable.  In total our gross wages were cut by about 60%. We ‘gained’ about 1,200 hours of work time which became our time. We also saved several thousand $ annually with our reduced commute and time to do basic things we were forced to outsource.  Also important, our taxable burden dropped to near zero as our AIG plummeted.  Largely out of necessity we couldn’t contribute hardly anything to our retirement accounts, which sucked during our accumulation years but becomes very important in this discussion.

To summarize, we lost about 2/3rds of our income when our hours went down by 40%. Critically (and through a long list of ‘savings’) we found we could meet our expenses this way, backstopped by our already considerable savings to weather ‘really bad things’..

So in the end the decision looks something like this.  Work ‘OMY’ (or two, or three…) at our current job (which we love!) or downshift and work several more years at reduce pay and severely reduced hours. To us the decision’s always favored the part-time, lower paying job.
Sure, if we worked one more year we’d pile another six-months expenses into our retirement accounts plus market gains, but it comes with a pretty heavy cost - namely another year where the dominant focus is on our job. On the other end of the spectrum, working part time met our expenses, and also came with another year’s market increase (decrease).  At this point in my financial journey the movement of the markets has a much large impact on my NW than any savings I can add even when working maximum hours.
For me personally, I’d rather work 5 years of part-time, reduced pay over another intense 1 year  fully time at my job which i love..

Put another way, those five years of working would total ~2.5x more hours than working OMY, but I’d wind up in a much better financial situation, a much healthier life situation, and I’d enjoy those hours spent working much more. And so this is being ‘baked in’ to our ER plan right now.

And while this might be completely naive, I don’t want to trade an entire year at 40 for several partial years throughout my 40s.

Thanks for this perspective! It is a very interesting insight into how it can actually work for someone.

I wasn't entirely sure - Are you doing this now? Were you able to convert your FT work to PT on a permanent basis, or were you able to find a PT job that met all your non-financial needs in a position?

My career is important to me, and maybe will be for a decade or so longer...(maybe!!)...if I could really make a go PT with work that ticked all the boxes, it would be very tempting! I'm saving more now than I have ever been able to save before....but it is just a small add on to market moves for the stache. I put in 1.5-2k on payday, and market gains/loss could be 40k. And whatever else the market did on the preceeding 13 days....It does seem to not have a very large impact at all!

[mistymoney]

and adding again that our jobs are just too much!

4 day work week! and 6 weeks vacation!!!

We would all thrive!!

[Metalcat]

and adding again that our jobs are just too much!

4 day work week! and 6 weeks vacation!!!

We would all thrive!!

That's why I downshifted way before reaching FI.

Some people seem to do fine with full time jobs. I personally can't find balance doing any one thing for more than half of my waking hours.

[AlanStache]

...
Some people seem to do fine with full time jobs. I personally can't find balance doing any one thing for more than half of my waking hours.

See that is why I spend half my work day in the mmm fourms :-)

[Metalcat]

...
Some people seem to do fine with full time jobs. I personally can't find balance doing any one thing for more than half of my waking hours.

See that is why I spend half my work day in the mmm fourms :-)

Lol, I'm here because my legs hurt.

[tooqk4u22]

If you have an awful job, then I understand the sentiment. But then you should have probably switched jobs or careers a long time ago.

I don't have an awful job, but I have been doing it for far too long, and I've become cynical. But, we go through our education, follow a career path and end up with a well paid job (and we support our family). Isn't that how life is?

Switching careers and starting over isn't really something that many people can do, especially when trying to build a FI stache at the same time. I think that having made it (pay wise), you might never fully recover from a career change. So people are inclined to slug it out, for as long as they can, in a situation that they might not enjoy or be good at. Many people don't ever make the sort of money that some of us here are on.

If it's forced on you, like @Malcat, that's something different. Likewise if you're FIRE'd and want a side gig, perhaps that's easier as you're not giving anything up - except some of your time.

I'd like to add that it's really hard to be motivated to learn a new job while suffering from severe burnout.

Yessssssss

What I wanted to do in retirement changed pretty dramatically when the fogma of burnout finally lifted.

Yeah. I am 3+ years FIRE and still feel burned out and don't want to do anything, and yet I have done a lot. But any time I have been approached for work for pay I basically, not literally, have convulsions.  And yet here I am thinking about going back to a megacorp bc portfolios are down ans inflation is high, and kids are approaching college (planned foe but who knows if it's enough) and DW has experienced some autoimmune health issues......do I want to...no....is it responsible to do so...I think so.

[tooqk4u22]

" However, the situations where it's truly a terrible, unavoidable, catastrophic situation where you can do nothing to mitigate the problem....I think they're few and far between, and the examples here seem to reinforce it."

Yes and no, in real time you dont know how your luck will run in the future or how badly the current decision will play out.  Hind sight you can always say someone should have done better and maybe they should have.  Personally I like having the padding to be able to shrug off most any financial event, but I dont have kids who want to be on the travel sportsball team.

I don't understand this though. I mean, sure there are edge cases where this could be true - traumatic brain injury, as Malcat said bein one. But the examples on this thread, again, emphasize the rarety of this situation. Clifp's example of Jill is a perfect example. She made a choice in real time. She could have handled it in real time by going back to work. She could have planned ahead of time to do it and budgeted for it earlier. Even medical, something I've said could cause significant problems, as Malcat again stated, could also not cause problems (as long as it's not a debilitating brain situation).

I mean, seriously, this whole thread is asking if people in the past year or two picked the worst time to retire. They are literally knowing about it in real time that their plans could be at risk and can respond to it. The whole SORR situation (as I understand it) talks about how by far the biggest risks happen in quick downturns after retirement....that by definition you would know about soon, not 20 years down the road where it's harder to get a job back because your skills/network may have atrophied.

Anything can happen, but I'm not seeing any evidence that it's likely at all to happen in a way that you can't respond to in real time.

There is a lot of back and forth about a bunch of whatever......but generally speaking. Which for all those rubbernecks driving by the crash and slowing everything down or those of you who FIREd in late 2021 or early 2022 at 4% and want to defend or critique every comment here and to apply statistical probabilities on how someone's view is misguided.....let me just say you are F'ing delusional and sticking your head in the sand..

Sure we don't know for sure how all this will turn out for the 2021/early 2022 FIREe but for F's sake you would have to be a F'ing moron to fall on a sword about a time when your portfolio (stocks and bonds got hammered while inflation was high and fed was tightening) and defend how it will all be great......not saying it won't....BUT the odds are greatly diminished and probably against you.   

It's not mathematically or statistically backrests but it is common sense!   So just stop!

[tooqk4u22]

Exactly, @Sandi_k! That is my back-up plan. I’ll happily get a job at Costco or Target to supplement our finances, if need be.

This is recency bias.   Whe those jobs were always out there they weren't as easy to getbpre pandemic......oh yeah, and back then they didn't beg and plead for youbto.take the job or agree to your f'all demand s that I can only work on Tuesday through Thursday from 10am to 2pm.   Back then it was...." you are new so you will be working Friday 5-11, Saturday 8am-9pm, and Sunday 10am-close".......that's not what I want,   ok go elsewhere...oh yeah and they harassed you the whole time and tried to get you to work more shifts. 

IT WILL REVERT BACK to some degree!

[Wolfpack Mustachian]

...
I certainly agree on the end of over emphasizing bad things as a risk. I do see what you're saying about SORR and bad luck working together.

It sounds like what you're talking about is a series of failures that compound. I agree this is a risk, but I would say that with each successive compounding failure that altogether mess things up, you also increase your chances of recognizing and reacting to it. Maybe you hit a reasonably bad year of stocks right after you retire. Then you decide you want to  pay for a kids 4 year degree. Now you've had two chances to, in real time, step back and say, I need to address this now in some way. You can address things in this way as they come, imo.

bold: I was not thinking of those two as as distinct, I was thinking of a Sequence Of Bad Luck in life and/or investments.

I am not a trained economist so I tend to not think of people as rational optimization machines :-)  Expecting everyone to be a good little mmm loving STEM professional will leave you disappointed.   I can certainly look back and see things I should have done to be in a better position today that I even sort of knew I should have done in the moment but did not get off my fat a-- and do.  Wolf maybe you would be better at seeing the bad things happening in real time and taking action - if so great you will do well.  A 1 in a million event in someone's life will happen every day in to someone in the US and those are the stories we will hear about, the stories about people who did take action and did correct there direction in life will not get posted in financial forums.  We here are a self selected sample that will probably take action earlier and harder than the general population, most people are "lucky" if they learn to pay off the lowest balance credit card first.

I do take and appreciate your point that we're not rational optimization machines. I'm sure I'm biased by my perspective as we all are. I do think, though, that my perspective is that I would be very likely to notice and react to these situations in real time, not because I'm a STEM professional or uber MMM follower or whatnot - more because I'm a scaredy cat :-). I'm sure I would be ok with my budget changing somewhat, but if I was going to spend an extra $20, 30, or 50k for a degree for a kid, for example, I would definitely be looking to do something to offset it, because if I didn't, I would be so stressed out. Likewise, if I had just retired in the last year or so, with returns as they are, I would be super stressed out and likely work on some serious PT work to offset things. That being said, my plan is likely work until 4% including fluff in my budget I can trim and then downshift instead of truly RE for at least a little while.

[Morning Glory]

Exactly, @Sandi_k! That is my back-up plan. I’ll happily get a job at Costco or Target to supplement our finances, if need be.

This is recency bias.   Whe those jobs were always out there they weren't as easy to getbpre pandemic......oh yeah, and back then they didn't beg and plead for youbto.take the job or agree to your f'all demand s that I can only work on Tuesday through Thursday from 10am to 2pm.   Back then it was...." you are new so you will be working Friday 5-11, Saturday 8am-9pm, and Sunday 10am-close".......that's not what I want,   ok go elsewhere...oh yeah and they harassed you the whole time and tried to get you to work more shifts. 

IT WILL REVERT BACK to some degree!

Erm, my highest paid job was like that. Monday 7am-7pm, Tuesday 7pm-7am, off Wednesday,  Thursday 7am-7pm again. Every third weekend fri-sat-sun in a row. They did not allow contracting with someone else get a straight shift,  everyone had to rotate, or find someone to trade each shift individually. They didn't even make an exception for a lady whose husband had alzheimers and couldn't be left alone at night (I ended up taking a lot of her night shifts).

I took a pay cut to change to a unit that only had day shifts and I still had to start at 5 am some days, and work every other Saturday.  Eventually went to one that was 4 8s instead of 3 12s so I'd have more time in the evening but there was a mandatory unpaid hour lunch break so I was still there 36 hours/week but only getting paid 32, so it wasn't any better.  Took another pay cut to leave there and finally use my degree (hours were more flexible with that one but pandemic made it more stressful, plus i was already burned out).

So anyway the ideas that your last job is your highest paid and that only low paid jobs have shitty hours are not always true. By the numbers there are more shift workers than people who work 9-5 in an office.